Par Pierre André Buigues
France’s has had a foreign trade deficit since 2003 and the country’s share of the world export market is continuing to drop. France’s share of the export market went from 6.1% in 1995 to 5.1% in 2000. It then fell to 4.2% in 2006 and stood at just 3.5% in 2013. The automotive sector provides a good example of this French industrial decline. In 2003, France’s automotive sector had a trade surplus of €12.6 billion but this had turned into a €6.9 billion deficit by 2014!
Economists put the decline of French foreign trade down to a lack of competitiveness, due to both price and other reasons. In France, costs have tended to increase faster than productivity and the products are not perceived as giving sufficiently high ‘value for money’, particularly compared with products “Made in Germany”.
The French aeronautical sector is an exception to this trend; indeed, the sector has prevented the balance of trade deficit from plunging further. The aviation sector – both civil and military – and the space industry have posted a foreign trade surplus in excess of €23 billion over the last few years, representing the largest surpluses in the overall French balance of trade. France is the world’s second largest exporter in the aeronautical field, with 22% of the worldwide market, after the United States (35 %). Germany is the third largest exporter with 14% of the worldwide market. France has seen its market share increase by 8% in ten years, unlike the agri-food and automotive sectors.
Airbus’ exports represent the lion’s share of French exports. Airbus accounts for roughly 50% of French exports in the aeronautical sector. Table 1 below shows direct sales of new French-built aircraft to foreign airline companies and the shipments of turnkey A380 aircraft from France to Germany for subsequent deliveries from the Hamburg site, as well as the value in euros (€M) of these exports.
The aeronautical sector is an oligopoly characterised by heavy capital investment and products with advanced technology . As such, the cost of entering the market is extremely high. In France, the aeronautical sector represents around 4,000 companies and employs 320,000 people directly. The success of the French aeronautical sector is the result of an industrial strategy built on strong technological assets, strategic European alliances and strong political support:
However, a certain number of challenges lie ahead for the French aeronautical industry.
1- Asia accounts for an increasingly large part of the global air-transport market and a new manufacturer could enter the market to compete with the two powerhouses, namely Airbus and Boeing. Airbus forecasts that passenger traffic in China will exceed that of the United States within 20 years and China aims to take a share of the aeronautical sector. To develop its sales in China, Airbus decided to increase its purchases of Chinese components and to set up an A320 assembly plant in the country.
2- France plays a pivotal assembly role in Europe. The country imports parts and aeronautical equipment, essentially from Europe (foreign trade deficit) and exports complete aircraft (large foreign trade surplus). Complete aircraft account for over two thirds of French aeronautical exports. Delocalising the assembly of Airbus aircraft therefore has a negative impact on France’s balance of trade. At the same time, Germany is taking an increasingly important position in the European aeronautical sector, with a growing number of A320s being assembled on the site in Hamburg. This is Airbus’s best-selling aircraft, already assembled on several sites, in Toulouse, Hamburg, Tianjin (China) and, since 2015, in Mobile (USA).
3- Aeronautical R&D accounts for over €3 billion of investment in France every year. However, within Airbus itself, the question is being asked as to whether R&D leadership has shifted from France to Germany. At the beginning of the 2000s, the R&D expenditure of Airbus France was one and a half times greater than that of Airbus Germany. Ten years on, the R&D expenditure in Germany was 10% more than in France. To be more precise, Airbus Germany is responsible for a significant section of the fuselage of Airbus planes and for the cabins. In addition, Germany is the leader in terms of materials R&D, although France is still the R&D leader for certain key components, such as the cockpit, flight controls, navigation and traffic management.
4- The aeronautical and space industry is also one of the rare industrial sectors in which jobs are being created, and in which skilled jobs are predominant. Engineers and managers account for approximately 41% of all the jobs in the sector. However, the French education system is not able to supply the aeronautical sector with all the technicians, welders, and metal workers that it requires. For instance, small-and-medium-sized aeronautical sub-contractors have much greater problems recruiting the staff they need than Airbus.
5- Finally, the industry also carries significant risks, considering the investment required to launch a new aircraft. Indeed, there was a fear the A380 would not be a commercial success. Each new aircraft brought onto the market can also run into serious problems, as in the case of the A400M. Consequently, there is no guarantee of success.
By Pierre André Buigues, based on research by Elie COHEN and Pierre-André BUIGUES (2014) “Le décrochage industriel”, Fayard, pp 439, [978-2-213-68188-7]; Pierre-André BUIGUES and Denis LACOSTE (2011) “Stratégies d’Internationalisation des Entreprises Menaces et Opportunités”, De Boeck, pp 376. [978-2804162917]
By Gaël Gueguen
Basing itself on results for Tour de France cyclists, this study shows that cultural differences between team members have no effect on performance, an observation which may also be valid, under certain conditions, for the workplace, where of the issue of diversity remains a subject of ongoing debate.
To what extent can one transpose certain well-known management concepts (such as team work, strategy, rivalry, etc.) to a sport, e. g. cycling, so as to better understand how it works, and, by extension, further our understanding of company life? A first attempt to answer that has been made in a study by Gaël Gueguen (assessed particularly in relation to the number of nationalities involved), that questions whether the cultural diversity of teams taking part in the Tour de France has an impact on their results.
High level sport necessarily draws on the best resources, whether human or material. A high level team will seek out the best possible athletes for a given budget and thus attempt to recruit in the world market. In the case of the Tour de France, where the internationalization of teams has intensified in recent years, there was a notable reduction in the number of exclusively national teams entered by traditional ‘cycling’ countries such as France, Italy, Spain, Belgium and the Netherlands between 1987 et 2009, and a corresponding upswing in the number of teams comprising five and more different nationalities. This trend is continuing: in 2015 for the first time, a South African team included two Eritreans. This globalization of professional sport, however, is not without risk: cultural diversity can lead to coordination problems (problems of mutual understanding, for example, when different languages are spoken within a team) and have a negative effect on racers’ team spirit (differences in values or attitudes). This question is all the more crucial in cycling, a discipline where the vital need for sponsors and the international nature of competitions sometimes requires that foreign sportsmen be recruited simply because their countries are targeted by the sponsoring brands.
Should we take care to only include sportsmen of similar cultures in high level teams, or can we drop the idea? Wouldn’t a group focused on a specific task requiring rare complementary resources and coordination in competitive situations (exceptional climbers, sprinters, ace cyclists, highly versatile leaders and so on) be weakened by too wide a diversity among its members? It would appear not. Cultural diversity has no impact on sports results. Cycling team coaches can select a cyclist for his worth regardless of nationality without worrying about strong cultural differences. A possible explanation for this is that the professionalism of cyclists and their managers compensates for any coordination problems. . Indeed, since everyone’s efforts are supervised and synchronized by a chief coach, the roles of all team members are clearly defined, and regular training also helps transform each cyclist’s tasks into a perfectly mastered routine.
A company is rarely made up of homogeneous human resources as regards gender, age, experience, nationality, salary, etc. Do such significant differences increase the performance of work teams or not? Analysis of studies on diversity in the workplace show contradictory results. Diversity of team members can in some cases, for example, increase creativity and improve decision-making (since the clash of different opinions can spark good ideas). In others, however, it can negatively affect unity, trust and communication with a corresponding increase in tension and conflict. Can the observation that diversity and performance in cycling appear not to be related, help us to better understand what is happening in the corporate context? No doubt, but only under certain conditions. The Tour de France competition is somewhat particular which makes it hard to generalize, firstly in that members of professional cycling teams are extremely specialized, and then that, in this most important cycling event, teams of only the nine best riders among the thirty-odd under contract compete with each other and not the entire group (which would, however, be the case for a company).
Nonetheless, the methodology used can easily be transposed for a study of the impact of cultural diversity in teams of top managers on the performance of multinationals. This is of interest now that more and more firms are diversifying their executive boards as they expand internationally. In a multinational company such as L’Oréal, for example, the recruitment of managers from different countries is considered to be the principal factor behind successful product-launches in emerging countries. To limit a ‘Tower of Babel syndrome’*, multicultural teams are organized around a leader who, through experience in a variety of countries, knows how to handle inter-cultural tensions.**
* Coordination difficulties arising from different languages spoken within a team.** “L’Oréal Masters Multiculturalism” de Hae-Jung Hong et Yves Doz (Harvard Business Review, juin 2013).
The article “Diversité culturelle et performance des équipes sportives de haut niveau : le cas du Tour de France”, by Gaël Gueguen (Management International, 2011).
Although cycling is a somewhat particular activity, especially given that all its participants are highly specialized, the results of this research may be applied to the workplace provided that certain conditions are met. In groups comprising team members with clearly defined roles and specific tasks it may be stated that neither cultural diversity nor other differences such as gender, origin, age or education have a negative impact on collective performance. As with cycling, a specific team culture that transcends cultural boundaries may well arise.
I analyzed the results of 487 teams (4,375 racers) taking part in 23 Tours de France between 1987 and 2009 in order to determine whether cultural diversity harms performance. The study was based on several factors which allowed me to determine the cultural heterogeneity of the teams (based, primarily, on the number of countries represented). The aim was to compare the performance of teams of cyclists (their results) with the level of cultural diversity via a linear regression analysis intended to measure the strength of the relationship between a series of independent variables and one requiring explanation.